Economic emancipation was a key driving factor behind Bangladesh’s struggle from freedom. The long and difficult journey towards this goal began as soon as the country snatched independence from the clutches of Pakistani occupational forces in December of 1971.
The yoke of Pakistan’s oppression had devastated Bangladesh’s economy. It was Bangabandhu Sheikh Mujibur Rahman who dreamt of a sovereign state with a democratic and non-exploitative society.
He envisioned an economy that depends on no foreign nation, and a society that ensures rights for everybody. Bangladesh achieved political freedom in 1971, but there were more struggles ahead to attain economic freedom.
Under the leadership of Bangabandhu, Bangladesh began building solid bedrock for the economy, but the country’s journey towards prosperity halted after the father of the nation was brutally assassinated along with most of his family members on August 15, 1975.
After a long gap, things started changing gradually for the better, as the pace of development achieved a reasonable pace since the past decade.
The poverty rate in Bangladesh has dropped to 18.7 per cent, and the extreme poverty rate stands at 5.6 per cent, show latest data from the Bangladesh Bureau of Statistics (BBS). The country is now marching towards sustainable development that Bangabandhu had dreamt of.
This development includes social development as well, indicated by the declining mortality rates of mothers and children. Over 60 per cent of the people are now of working age, so the country is currently getting the benefits of a demographic dividend.
According to a number of international agencies, Bangladesh is currently one of the fastest-growing economies in the world and has become a role model of growth for other nations.
The country is on its way to graduate as a developing country in 2026 and will become an upper-middle-income country by 2030. Bangladesh is also on the path to become a trillion-dollar economy by 2040 and a high-income country by 2041.
But this journey was anything but smooth. Following Bangladesh’s independence, it was a tough struggle for Bangabandhu and his associates to start afresh when there was almost no road transportation system left, farming was on the decline due to a lack of technology, and administration was in a poor condition.
Bangabandhu’s steps to revive economy
The new Bangladesh government started intensively working on the economy, infrastructure, and social development under the leadership of Bangabandhu Sheikh Mujibur Rahman, following his homecoming on January 10 of 1972.
Facing countless issues, the country decided to concentrate on rehabilitation, reconstruction, and development. Many larger industries, trading and transport, banks, and insurance were nationalised, which included 725 industrial enterprises, and commercial concerns.
Bangabandhu knew that the country’s economic backbone was agriculture, and if Bangladesh could be self-dependent in food production, the crisis would be averted smoothly.
Of the Tk 500 crore development budget for FY 1972-73, the Bangabandhu-led government earmarked Tk 101 crore only for agricultural extension and development.
Bangabandhu started focusing on food security, and had said that the green revolution cannot be achieved on paper only. He asked the agriculture teachers to go to villages and provide students and families with hands-on education on the subject.
During the liberation war in 1971, the Pakistani army emptied government grain warehouses and took them to the cantonments. Agricultural production was not immediately possible after independence.
Even harvest paddy was not easy as around one crore people took shelter in neighbouring India. To encourage farmers, Bangabandhu waived land tax for up to 25 bighas and withdrew all certificate lawsuits filed against the farmers to facilitate crop production.
Bangabandhu established the Bangladesh Agricultural Research Council, Jute Research Institute, reorganised Bangladesh Agricultural Development Corporation (BADC) and Bangladesh Rice Research Institute, and also established Agricultural Research Institute.
The first institution he established to plan economic advancement was the Bangladesh Planning Commission, on January 31, 1972.
The first-ever budget of Bangladesh was just Tk 786 crore. Most of which were foreign grants, while the country’s foreign currency reserve was zero. Investments were nine per cent of GDP and life expectancy was only 47 years.
Bangabandhu in the first ever five-year plan of 1973-78 chalked out how the country would rise from the ashes.
Bangladesh's per capita income was $94 – equal to Tk 580 – in FY1972-73 – the year after independence. After 31 years, per capita income reached the $500 milestone.
The country was undoubtedly moving in the right direction under Bangabandhu’s leadership since 1972. He was able to triple the per capita income in just four years. In 1975, per capita income rose to $273.
In 1976, in Bangladesh without Bangabandhu, the figure again fell to $138 and the following year it fell to $128.
Rising from the ashes
Just one day before the surrender on December 16, 1971, Pakistani army officials planned to burn money in the central bank vault. The aim was to paralyse the now independent country.
Before leaving the bank, they set fire to the cash counter of the bank, outside the vault and the notes kept in the vault at Motijheel in Dhaka. The Pakistani bank officials left the bank unattended which helped some criminals steal money.
After independence, the Bangladesh government managed to recover Tk 30 crore, which was looted by the local people.
During Pakistan’s rule, there were no Bengali senior officials appointed at two of the most important departments of the commercial bank – credit department and foreign exchange department.
As a result, when the Pakistani staff left, Bangladesh did not have enough experienced officials to run the banking system. Sheikh Mujibur Rahman’s government had to reorganize the banking sector from scratch.
As Bangladesh did not have any foreign currency, Bangabandhu took steps to open a Nostro account in the Bank of England with only 50,000 pounds-sterling given by the then Indian government as a loan.
India gave another $5 million as a grant and a second Nostro account was opened at the Mumbai branch of the Reserve Bank of India.
Where do we stand now?
Bangladesh started developing gradually over the decades. The service sector got a massive boost after the economy was opened to the private sector in the 80s, though the country’s economy was still driven by agriculture during that period.
The sectoral share of broad agriculture, industry and service stood at 11.20 per cent, 37.56 per cent and 51.24 per cent respectively in FY 2022-23.
Bangladesh’s exports grew 6.67 per cent year-on-year and reached $55.55 billion in FY23, riding on the extraordinary performance of the apparel sector. It was only $348.42 million in FY 1972-73.
The country received $21,610.66 million in remittance in FY23, which was only $10 million back in FY76, according to Bangladesh Bank data.
Per capita power consumption is an indicator of how the country is marching towards development. The country’s per capita power consumption reached 422 KWh in FY2020-21, compared to only 78.23 kWh in 1995, show Bangladesh Bureau of Statistics (BBS) data.
Mobile communication systems and internet services have brought revolutionary changes in the country’s socio-economic sector. The total number of Mobile Phone subscribers reached 185.13 Million at the end of May 2023.
According to Bangladesh Telecommunication Regulatory Commission data, the number of mobile internet users stood at 117.25 million in May this year. Meanwhile, the number of Internet subscribers reached 129.40 million in June 2023, which include ISP and PSTN users.
